a blinking o/d light is like the check engine light for the transmission. it has a trouble code stored, which you can retrieve by turning the ignition to "on"(without starting the engine) and using a paper clip to jump terminals TE1 and E1 in either diagnostic plug(under the dash, below the coin holder or under the hood by the wiper motor close to the firewall) count the code it blinks.

its most likely a shift solenoid, as i have the same problem(code 62, solenoid#1) and if its in D it starts out in 3rd because the solenoid is stuck. you can probably still get to first gear by shifting to L depending on which solenoid is bad.

 

Hi I have the same issue (car drives around in 3rd while in "D", shifts fine manually, od light blinks steady) and code 62 in my sister's 93 camry xle. The shop that pulled the code told her that they also checked the solenoid, and it was operating ok. They told her that it's most likely a problem in the wiring or less likely a problem with the ECU. As they want $95/hr, and guestimated her @ 5hrs to diagnose/fix electrical continuity, I figgured that I'd at least try to check it out for her.

I have VERY little experience with electrical issues, but I'm a quick learner, and I have a multi-meter Can someone post the process to check continuity from the No1 solenoid to the ECU?

Sorry to thread hijack, and thanks in advance for any guidance